The U.S. Senate advanced the 21st Century ROAD to Housing Act in an 84-6 cloture vote, moving the bill closer to a final floor vote.
Included in the legislation is a provision that prohibits the Federal Reserve from issuing a retail central bank digital currency (CBDC) until December 31, 2030.
While the bill enjoys bipartisan support, a group of House Republicans is demanding the ban be made permanent, citing concerns over financial surveillance and privacy.
The U.S. Senate has taken a significant step toward passing a sweeping housing affordability package that doubles as a legislative roadblock for a potential digital dollar. On Monday, lawmakers voted 84-6 to invoke cloture on the 21st Century ROAD to Housing Act, a bipartisan effort led by Senate Banking Committee Chairman Tim Scott and Ranking Member Elizabeth Warren. Tucked within the 300-page document is “Title X,” a provision that specifically targets the Federal Reserve’s authority to issue a retail central bank digital currency (CBDC).
The legislative text amends the Federal Reserve Act to introduce a temporary moratorium on the creation of any digital asset that is “widely available to the general public” and serves as a direct liability of the Federal Reserve. This prohibition is currently set with a sunset clause, meaning the ban would expire at the end of 2030 unless further legislative action is taken. The bill does, however, provide a carve-out for private stablecoins, clarifying that the restriction does not apply to dollar-denominated currencies that are “open, permissionless, and private.”
Despite the strong bipartisan showing in the Senate, the temporary nature of the ban has sparked friction with House conservatives. A group of 28 Republican lawmakers, led by Representative Michael Cloud, sent a letter to House Speaker Mike Johnson and Senate Majority Leader John Thune urging that the ban be made permanent. The group argues that a sunsetting provision is “watered down” and fails to protect Americans from what they characterize as “unconstitutional financial surveillance.”
“A prohibition on a Central Bank Digital Currency must be permanent,” the lawmakers wrote in the letter. “A CBDC is inherently anti-American and a looming issue we must put an end to before it is too late.” This sentiment was echoed by Senator Ted Cruz, who has filed an amendment to the housing package seeking to convert the temporary block into a lasting statutory ban.
Market analysts at TD Cowen suggest that while the Federal Reserve has repeatedly stated it would not issue a CBDC without explicit congressional authorization, a formal ban would benefit private stablecoin issuers by removing the threat of a government-backed competitor. However, analysts also warned that the inclusion of CBDC language in the housing bill could inadvertently slow down other crypto-specific legislation, such as the Clarity Act, as lawmakers may feel they have already addressed the industry’s most pressing regulatory concerns for the current session.
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